ONGC to discuss power project plans at board meet

THE February board meeting of ONGC is expected to be dominated by power project proposals. While the 750-MW ONGC Tripura Power Company Ltd (OTPCL) will occupy centre-stage, ONGC will also submit firm proposals for setting up wind farms of 50 MW each in Gujarat and Karnataka.

Sources in ONGC and IL&FS Ltd the implementing agency for the Tripura project confirmed that ONGC Tripura was approaching financial closure by March 2006. The project finance company also holds the majority 50 per cent stake in OTPCL.

"The detailed project proposal including the equity structure will be placed for board's approval this month, following which we will tie up the loan finance for OTPCL," ONGC sources said.

IL&FS, which has held negotiations with banks and financial institutions, feels that the remaining procedures, including firming up of loan finance, are likely to be completed within 30 days of the board's approval.

The energy major has pegged the cost of the 2 X 375-MW gas-based power plant at Palatana in South Tripura district at Rs 2,400 crore at the prescribed 70:30 debt-equity ratio. ONGC will hold 26 per cent equity and the State Government is offered 24 per cent stake.

While ONGC Tripura will help ONGC to ensure optimal use of its natural gas production capacity in Tripura, the company plans to reduce operational costs at its installations in Gujarat and Karnataka by harnessing wind energy and replacing equivalent amount of high cost grid power.

The total project cost is estimated to be close to Rs 400 crore. The project will also attract fiscal benefits. The payback period is estimated to be three to four years. The company has appointed consultants for preparing the detailed project reports.

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